Checklist · Your first UK employee
First UK hire: a founder's payroll checklist
Hire number one is where payroll stops being a plan and becomes a legal obligation with dates on it. Here is what has to be in place, in the order it has to happen.
Hire number one is where payroll stops being a plan and becomes a legal obligation with dates on it. Here is what has to be in place, in the order it has to happen.
Everything below is the same either way, except the registration itself. A UK company employing someone here registers an ordinary PAYE scheme, and it covers every hire after this one too. A company sitting abroad with no UK entity usually needs a DPNI scheme, registered in the employee's name, one per person. Not sure which side of that line you are on? The route finder names the scheme in four questions, and our guide to whether you need a UK company covers the reasoning.
Register the scheme. HMRC references are the one thing you cannot hurry, and nothing else can be filed without them.
Contract signed, right to work checked, pension scheme chosen, starter details collected.
Run it, check it against the contract, issue the payslip, file the RTI report on or before the day they are paid.
Pay HMRC by the 22nd of the following month, upload the pension, and keep the rhythm going.
Salary is the number founders quote each other. These are the ones that decide what the hire actually costs you, at 2026/27 rates.
| What | 2026/27 |
|---|---|
| Employer National Insurance | 15% of earnings above £5,000 a year |
| Employment Allowance, if you qualify | Up to £10,500 off the employer NI bill |
| Pension, minimum total contribution | 8% of qualifying earnings, at least 3% from you |
| Auto-enrolment earnings trigger | £10,000 a year, ages 22 to State Pension age |
| National Living Wage, 21 and over | £12.71 an hour |
| Statutory Sick Pay | Payable from day one of sickness |
All of those sit on our rates and thresholds page, with the detail in employer's National Insurance explained and the full sum in what a UK employee really costs. The pension duties are the ones first-time employers most often assume start later than they do, so read the auto-enrolment guide before the start date, not after it.
A UK employer paying one person is £55 a month plus £7 per payslip, with UK employer PAYE setup from £100. An overseas employer with no UK entity is a DPNI scheme at £157 a month per scheme, with setup at £500 if you go ahead within two weeks of your quote, and £750 otherwise. Those are 2026/27 rates, and there is no VAT to add because we are not VAT registered. If you would rather buy the whole first hire as one package, the UK First-Hire Pack bundles the right-scheme check, the registration, the pension and the first three payrolls from £549 on the own-PAYE route and £799 on the DPNI route.
A quick illustration
Take a fictional two-person ceramics studio in Stoke-on-Trent, hiring a kiln technician on £29,000 and budgeting the salary alone. Employer National Insurance on earnings above £5,000 adds £3,600 a year, and the pension at 3% of qualifying earnings adds roughly £680, so the hire lands nearer £33,300 before anyone has bought a pair of gloves. The Employment Allowance covers the National Insurance in their case, but only because they checked the conditions rather than assuming. Hiring is not dear. The second and third numbers just need to arrive in the plan alongside the first.
Yes. There is no headcount below which PAYE stops applying. One employee means a registered scheme, a payslip every pay period, an RTI report to HMRC on or before each payday, and PAYE and National Insurance paid over monthly.
On the day your first member of staff starts work, not at some later headcount. In 2026/27 a worker aged 22 up to State Pension age earning more than £10,000 a year has to be enrolled automatically, with 8% of qualifying earnings going in and at least 3% of that from you. Staff outside those limits still have rights to join, which is why the assessment happens every pay period rather than once.
Only if the working relationship genuinely is one. Employment status follows the reality of the arrangement, not the label on the invoice, and if HMRC decides the person was an employee, the PAYE and National Insurance are yours to pay. Worth settling before the first payment rather than after it, and our note on off-payroll rules covers the ground.
A UK company registering an ordinary PAYE scheme is usually quick. A DPNI scheme is slower, because it cannot be done online, so give it real time. We set out what to expect in how long UK payroll setup takes. Either way, a first payday can still be run and the employee paid while the scheme is being opened, with the filing caught up once HMRC issues the references, so a slow registration does not have to mean an unpaid employee.
This page is general information, not tax, legal or employment advice, and reflects the published rates for the 2026/27 tax year. Your own position may differ, so please check it or get advice before acting.
Tell us where the company is registered, when they start and roughly what you are paying. We will confirm the right scheme and send a fixed monthly fee. Within one UK business day.
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